Ngai Hing Hong Co Ltd reports 20.3% EBITDA growth and 0.63 pp EBITDA Margin growth from 2.1% to 2.7%
24/09/2015 • About Ngai Hing Hong Co Ltd (
$1047) • By InTwits
Ngai Hing Hong Co Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 2.7% in FY2015, 2.1% in FY2014, 2.4% in FY2013, 1.0% in FY2012, 3.1% in FY2011
- Ngai Hing Hong Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has potentially unprofitable business model: ROIC is at 3.1%
- It operates with high leverage: Net Debt/EBITDA is 5.3x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ngai Hing Hong Co Ltd ($1047) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,688 | 1,640 | 1,869 | 1,757 | 1,620 | -7.8% |
| Gross Profit | 168 | 142 | 184 | 192 | 199 | 3.8% |
| SG&A | | | 157 | 171 | 179 | 5.0% |
| EBITDA | 52 | 17 | 44 | 36 | 44 | 20.3% |
| Net Income | 31 | 1 | 22 | 3 | 25 | 678.3% |
Balance Sheet
|
|---|
| Cash | 96 | 93 | 112 | 97 | 88 | -9.5% |
| Short Term Debt | 344 | 294 | 345 | 295 | 317 | 7.7% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 32 | 9 | 11 | 9 | 13 | 41.1% |
Ratios
|
|---|
| Revenue growth | 32.7% | -2.8% | 13.9% | -6.0% | -7.8% | |
| EBITDA growth | -15.2% | -67.0% | 157.8% | -18.2% | 20.3% | |
| Gross Margin | 9.9% | 8.6% | 9.8% | 10.9% | 12.3% | 1.4% |
| EBITDA Margin | 3.1% | 1.0% | 2.4% | 2.1% | 2.7% | 0.6% |
| Net Income Margin | 1.8% | 0.1% | 1.2% | 0.2% | 1.6% | 1.4% |
| SG&A, % of revenue | | | 8.4% | 9.7% | 11.1% | 1.3% |
| CAPEX, % of revenue | 1.9% | 0.5% | 0.6% | 0.5% | 0.8% | 0.3% |
| ROIC | 5.0% | -0.1% | 3.2% | 2.3% | 3.1% | 0.8% |
| ROE | 7.4% | 0.3% | 4.8% | 0.7% | 5.2% | 4.5% |
| Net Debt/EBITDA | 4.8x | 11.7x | 5.3x | 5.4x | 5.3x | -0.2x |
Revenue and profitability
The company's Revenue decreased on 7.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.63 pp from 2.1% to 2.7% in FY2015.
Gross Margin increased slightly on 1.4 pp from 10.9% to 12.3% in FY2015. SG&A as a % of Revenue increased slightly on 1.3 pp from 9.7% to 11.1% in FY2015.
Net Income marign increased slightly on 1.4 pp from 0.18% to 1.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 0.81%. Ngai Hing Hong Co Ltd's CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 0.65%.
Return on investment
The company operates at low ROIC (3.09%) and ROE (5.21%). ROIC increased slightly on 0.82 pp from 2.3% to 3.1% in FY2015. ROE increased on 4.5 pp from 0.68% to 5.2% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.3x and Debt / EBITDA is 7.3x. Net Debt / EBITDA dropped on 0.2x from 5.4x to 5.3x in FY2015. Debt increased on 7.7% in FY2015 while cash decreased on 9.5% in FY2015.
Appendix 1: Peers in Chemicals
Below we provide Ngai Hing Hong Co Ltd benchmarking against other companies in Chemicals industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bestway International Holdings Ltd ($718) | | -25.4% | -62.1% | 330.3% | 238.4% |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 39.7% | -33.6% | 5.5% | 29.1% | |
| China XLX Fertiliser Ltd ($1866) | 29.3% | 7.0% | 0.6% | 28.0% | |
| Century Sunshine Group Holdings Ltd ($509) | 49.2% | 68.7% | 32.0% | 26.4% | |
| Landing International Development Ltd ($582) | -50.7% | 2.1% | 15.9% | 23.3% | |
| |
|---|
| Median (31 companies) | 25.8% | 2.1% | 9.4% | 2.2% | 120.3% |
|---|
| Ngai Hing Hong Co Ltd ($1047) | | -2.8% | 13.9% | -6.0% | -7.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 74.3% | 70.5% | 69.1% | 70.8% | 69.9% |
| China Flavors & Fragrances Co Ltd ($3318) | 41.3% | 46.8% | 48.6% | 47.8% | |
| Smartac Group China Holdings Ltd ($395) | 17.3% | -1.8% | 11.2% | 40.4% | |
| Bracell Ltd ($1768) | 40.1% | 30.5% | 37.3% | 37.3% | |
| Yingde Gases Group Co Ltd ($2168) | 34.2% | 31.7% | 31.0% | 32.1% | |
| |
|---|
| Median (31 companies) | 19.8% | 19.5% | 18.5% | 17.7% | 55.2% |
|---|
| Ngai Hing Hong Co Ltd ($1047) | 9.9% | 8.6% | 9.8% | 10.9% | 12.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 66.4% | 63.8% | 59.1% | 60.0% | 58.3% |
| Bracell Ltd ($1768) | 30.1% | 22.3% | 30.8% | 38.2% | |
| Yingde Gases Group Co Ltd ($2168) | 32.3% | 29.4% | 29.8% | 32.3% | |
| China First Chemical Holdings Ltd ($2121) | 29.7% | 26.6% | 30.0% | 29.6% | |
| Century Sunshine Group Holdings Ltd ($509) | 15.5% | 24.2% | 28.1% | 27.6% | |
| |
|---|
| Median (31 companies) | 15.5% | 15.8% | 14.5% | 13.8% | -28.6% |
|---|
| Ngai Hing Hong Co Ltd ($1047) | 3.1% | 1.0% | 2.4% | 2.1% | 2.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Landing International Development Ltd ($582) | 27.9% | 7.2% | 29.6% | 419.5% | |
| China Zenith Chemical Group Ltd ($362) | 36.8% | 147.3% | 55.7% | 67.4% | |
| Smartac Group China Holdings Ltd ($395) | 22.5% | 14.0% | 4.7% | 49.3% | |
| China Flavors & Fragrances Co Ltd ($3318) | 16.4% | 15.8% | 20.1% | 42.4% | |
| Bracell Ltd ($1768) | 24.4% | 22.3% | 64.3% | 35.4% | |
| |
|---|
| Median (31 companies) | 8.7% | 9.6% | 8.7% | 5.9% | 2.6% |
|---|
| Ngai Hing Hong Co Ltd ($1047) | 1.9% | 0.5% | 0.6% | 0.5% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 34.6% | 28.7% | 25.2% | 26.2% | 23.3% |
| Tiande Chemical Holdings Ltd ($609) | 24.4% | 26.2% | 29.4% | 20.7% | |
| Century Sunshine Group Holdings Ltd ($509) | 3.5% | 11.3% | 15.9% | 16.4% | |
| Fufeng Group Ltd ($546) | 13.9% | 9.6% | 10.8% | 11.6% | |
| Yingde Gases Group Co Ltd ($2168) | 14.7% | 10.6% | 11.5% | 11.5% | |
| |
|---|
| Median (31 companies) | 8.2% | 6.9% | 8.1% | 5.9% | 11.1% |
|---|
| Ngai Hing Hong Co Ltd ($1047) | 5.0% | -0.1% | 3.2% | 2.3% | 3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.4x | 2.2x | 4.6x | 18.1x | |
| China XLX Fertiliser Ltd ($1866) | 2.4x | 2.6x | 5.1x | 5.8x | |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 4.3x | 14.1x | 6.5x | 5.3x | |
| Sinofert Holdings Ltd ($297) | 4.3x | 2.9x | 32.4x | 5.0x | |
| Billion Industrial Holdings Ltd ($2299) | -0.3x | 0.5x | 2.7x | 4.1x | |
| |
|---|
| Median (24 companies) | 1.3x | 1.2x | 2.1x | 1.4x | -0.8x |
|---|
| Ngai Hing Hong Co Ltd ($1047) | 4.8x | 11.7x | 5.3x | 5.4x | 5.3x |
